In the signaling theory of education,
a. schooling itself does not lead to more productive workers.
b. chance plays more of a role than in the human-capital theory.
c. schooling enhances worker productivity.
d. compensating differentials do not matter.
a
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Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase health insurance?
A) the individual who is trying to purchase the policy B) the employer of the individual C) the health insurance company D) All parties in the health insurance market have access to the same amount of information.
Assume that policy makers are pursuing a fixed exchange rate regime. Assume that the economy is initially operating at the natural level (i.e., Y = Yn). Suppose a reduction in wealth causes households to reduce consumption. This wealth-induced decrease in consumption will cause which of the following to occur?
A) The real exchange rate will be permanently higher in the medium run. B) The real exchange rate will be permanently lower in the medium run. C) The effects of this devaluation on the real exchange rate will be ambiguous in the medium run. D) The real exchange rate will be unchanged in the medium run.